COST OF PRODUCTION 219 
Such is the comprehensive idea of cost of production, 
but, as it stands, it is of little direct avail for the purposes 
of making our estimates. It will be well to remember, 
however, that such is the idea with which we start. 
These various efforts and sacrifices will find a suitable 
measure in the money which has to be paid for them, 
and this will constitute the money cost of production, or 
the expenses of production. These expenses will differ 
on different farms, some farmers being able to produce 
at a lower cost per unit than others. Account must be 
taken of this fact, and in the case of a commodity such 
as wheat, which obeys the law of decreasing returns, the 
expenses of production are best estimated with reference 
to the ‘‘margin of production,’’ for it is here that the 
amount which can be produced is determined. For our 
purposes, however, the margin is not at present situated 
among vastly inferior soils, where great differences in 
yield are noticeable. It is methods of production which 
bring about such widely differing yields more than 
differences in soil fertility, because with a relatively 
small area of production there are still large tracts of 
fertile land open to the farmer. With sufficient regard 
for these difficulties an attempt will be made in the 
succeeding section to summarise the chief factors which 
enter into the cost of production of wheat in New 
Zealand. Actual statistics so far as they are available 
will be used for the purpose of setting out some fairly 
reliable estimate. Such an estimate will doubtless be 
open to correction, but it is given after a careful 
observation of the wheat industry for some time, and 
as a result of an investigation into the actual conditions. 
The recent extraordinary conditions created by the 
general rise in prices are not to be considered as 
relevant to the discussion, only pre-war conditions being 
considered. 
